Weak growth and a recovery that is “weak, uneven and in danger of stalling yet again” is haunting the world economy, the latest Brookings Institution-Financial Times tracking index warns.
Professor Eswar Parasad, an economist at Brookings, told the Financial Times
that the worst fears of a financial and economic crisis in January and February “might be over but after yet another year of tepid growth in 2015, the world economy in 2016 faces the unsettling prospect of more of the same.”
“The index shows how measures of real activity, financial markets and investor confidence compare with their historical averages in the global economy and within each country. There is evidence of extreme weakness in emerging markets, with recent data from many economies faring much worse than their historic averages, although there has not been a further decline in 2016,” The FT reported.
"Unless governments demonstrate the ability and willingness to undertake reforms and use policy measures to aggressively support growth, even the anticipated weak growth could be knocked off track," Prasad told the FT.
The report added to weak consumer spending and trade data in suggesting economic growth moderated further at the turn of the year after slowing to a 1.4 percent annualized pace in the fourth quarter. Estimates for first-quarter gross domestic product growth are currently below a 1 percent rate, Reuters
Meanwhile, “economists have dramatically cut their forecasts for U.S. economic growth in the first quarter of 2016. Falling car sales, equipment purchases by businesses and a downward revision to consumer spending have darkened the view,” CNNMoney
For example, the Atlanta Federal Reserve's forecast for first quarter growth is now 0.4%, a massive dial down from 2.5%
(Newsmax wire services contributed to this report).
© 2023 Newsmax Finance. All rights reserved.